How I live on $25,000 a year

Remember Slackerology? My probably best-selling, award-winning, religion-changing, planet-saving book proposal may have fizzled out on the desks of 26 editors, to the detriment of all society (history will vindicate me), but I’m still living and honing the theory every day.

[If you need to get up to speed on the modern, minimalist lifestyle I’ve cheekily labeled ‘Slackerology’, you can read about it in great detail here, here, here, here and here or read an incredibly condensed explanation here.]

Further to that, I recently had the occasion to do a detailed calculation of my annual living expenses for the first time (oddly) since moving back to the US and, while I knew the number would be low, the total shocked even me.

My base annual expenses came in at almost exactly US$25,000. Add in the expenses for a few, longish, non-work trips and I’m pegging my annual sustainable income needs at about 28 grand.

How the Bachmann do I do it? Before I tell you, one little thing…

This blog post is entitled “How I live on $25,000 a year,” not “How you can live on $25,000 a year.” Every person and living situation is going to be different. So, those of you who are already getting tuned up to post a comment like “Dear Pompous Ass, what you’ve said here just isn’t feasible when you’re from [place with an inordinately high cost of living] and live 10 miles from work, so thanks for the useless information, but I can’t blah, blah, blah, lame excuses, blah…” can save yourselves the effort. I do not care and I will probably mock you. However, I’d be overjoyed if you gleaned and applied even one or two ideas from this post that could potentially make a difference to your annual living expenses.

OK, my base annual living expenses are comprised of the following list:

• Mortgage/condo association fee – I live in a 606 square foot (56.3 square meter) condo in a non-flashy building, in the dead-center of Minneapolis, a city that happens to have reasonable property prices. And I have space to spare. As I’ve proselytized previously, people don’t need very much space to live comfortably. My mortgage and condo association fee (which pays for everything except electric, internet and phone) comes out to roughly $1,120 a month.

• Phone – I only have a cell phone (no landline), with voice and data service. No text messaging. Why no text messaging? Because it costs an extra $10 a month and my Android has email, five kinds of instant messaging/chatting software and, oh yeah, makes phone calls. Remember phone calls? Also, text messaging is destroying in-person social interaction (I’m speaking of those people who send/receive one text message for every six waking minutes of their day and give those texts priority over the people sitting right next to them) and greatly increases the chances that idiots will hit me with their cars. But my friends are hard to train and they still send me texts now and then, which cost 15 cents each. So, my cell phone bill fluctuates between $59 and $61 a month.

• Groceries – I typically spend $40-55 a week on groceries.

• Transport – This is the estimated, seasonally fluctuating expense for my rechargeable bus/train pass and the maintenance for my bike. I work from home and rarely ride public transport in the warmer months. I estimate that I pay roughly $300 a year.

• Entertainment/food/alcohol – A generously padded fund. I don’t go out for lavish dinners of lobster burgers and foie gras dogs very often, but I do more than my fair share of brunches, food trucks, happy hours, drinks, burgers, burritos, delivered pizzas, and movies. Also, I enjoy the occasional (case of) wine and cider. I’ve allotted $4,300 a year.

• Health insurance – I happen to be an exceptionally healthy and (attention ladies) virile 41 year old. With my history of indestructibleness, I have made what seems like a sensible gamble and only purchased basic, individual health insurance which costs $87 a month.

• Miscellaneous – I landed on $1,800 a year. An admittedly arbitrary, but I believe safe, number for irregular purchases such as clothes, books, DVDs, presents and, every third year or so, a new laptop and smartphone, among other things.

That’s it. That’s 25 grand.

Now, you may notice a few, glaring omissions from that list, including:

• Car –As I’ve already described in wretched detail, car ownership is second only to shelter in daily expenses and one of the leading time-consuming maintenance burdens and hair-yanking stress triggers for most people. Admittedly, this choice is especially easy for me because I work from home and I’ve located myself in a walkable neighborhood that also happens to be my city’s main public transport hub, but there you go. Not owning a car means approximately $9,000 that I don’t have to raise each year to keep it physically and legally running.

• Gym membership – My condo group shares an embarrassingly basic, but perfectly passable fitness center. Nevertheless, most of my neighbors maintain gym memberships elsewhere, because they’ve convinced themselves they’ll get a better workout if there are more sweaty people around, white towels everywhere, a different, refrigerator-sized apparatus for every muscle group and cardio equipment with cable TV that constantly measures 16 vital signs and sperm count. Even without my pitiable fitness center, I’m confident that I could get a perfectly good workout by purchasing a few, small, key pieces of equipment (about the same price as maybe two or three months of gym membership fees), educating myself on do-it-yourself cardio and muscle isolation exercises and good old fashion discipline.

• Dental – I’m one of those medical tourists you read about. I get my teeth checked out in Romania every summer while doing guidebook research. A check-up costs about US$15. I’ve had a few very old fillings drilled out and refilled in recent years, which, with x-rays, costs about US$20 each.

• Pets – Disclaimer that pet owners should read before sending hate mail/comments: I am already acutely aware that I approach life with what is apparently an especially high level of critical logic and common sense. Imagine a high-functioning Rain Man, but with better taste in food and TV. People behaving in a manner seemingly devoid of logic and common sense is a source of endless bafflement and frustration for me. At the top of this list is any action/behavior/philosophy motivated by religion, followed closely by how utterly useless nearly all politicians have become, but pet ownership is probably in the top 10. What pet owners see as emotionally uplifting companionship, cuteness and I don’t know what else, I see as an unnecessary output of resources. Never mind that caring for pets requires mild (goldfish) to substantial (dogs) time and energy, not to mention the ongoing disposal of fecal matter, vomit and the logistical management for whenever one wants to leave town or even have a long day away from home if Fido/Fluffy shits/barfs on the carpet if he isn’t attended to every six hours, but those extra expenses add up quickly. Especially so when the pet gets old or sick. Even in a year with no pet emergencies, those expenses mean all the more hours you have to be at work to raise the money to keep that pet alive, as well as time away from work/friends to care for the pet when they get into the dark chocolate or tin foil. If you have the debilitating craving for non-verbal companionship and the daily clean-up of another entity’s excretions, go volunteer at a hospital ICU or animal shelter or something.

• Shopping – I don’t shop. Correction: once or twice a year, someone close to me corners me with a shotgun, binds my hands, injects me with a sedative, throws me into the trunk of a car and drives to an Old Navy. This is how I get new clothes. Apart from that, I don’t shop. This is largely due to the fact that my job/social life do not require dressy attire or even all that much variety. Lastly, “de-crapify your life” is one of the base tenets of Slackerology, and idle shopping – clothes, knickknacks, whatever – does not mix with having less crap. Plus, shopping makes me sleepy and hungry.

That’s pretty much the gist of it. A low-impact, comfortable, well-fed, frequently inebriated lifestyle for 25 grand a year, what many people could earn in a low-stress, part-time job – or full-time freelance travel writing in a shitty economy. Add two vacations in foreign lands each year and bump it up to 28 grand. Any additional income you want for savings/investments is up to you. (Obviously, adjust for the cost of living and income in your area.)

So, please help this high-functioning Rain Man to understand, why do people sacrifice free time, friends, family, health and a decent night’s sleep to earn double or triple that much and more?

Nope. In fact I took about 20 flights this year. I was based in Berlin, twice, and Istanbul throughout the year, renting a room in flatshares, if I was on the road I was mostly couchsurfing (unless I was in some village with no hosts).

You’re not THAT much younger than me, how can my health insurance cost SO MUCH when yours costs so little? Does MN have a state plan? Can we be domestic partners?

I think we’re living on about 1k/month more than you. We have a car (paid for) and a 2bd house (not paid for). During one recent bad year, I filed my taxes at 28k, less than I’ve earned since college. We weren’t feeling particularly deprived.

I think reader Ira has some math to present if he wants us to believe him.

@Another Amy – I had a distinct advantage in my de-crapifying: I was leaving the country to travel indefinitely. Hanging on to stuff simply wasn’t an option. I did end up storing a couple boxes of clothes, books, photos with my parents. Everything else was sold/donated/tossed. It was an anxiety-fueled exercise, but the ultimate relief of having discarded all that crap was exhilarating. Not sure that I could have been so disciplined if I hadn’t been leaving the country.

Traveling indefinitely is my intent too. For awhile, I didn’t have specific plans, so it was too easy for me to drift. Finally, I decided on the first leg of my journey, and gave notice on my rental. Feels invigorating and terrifying.

I’m 40, so not only do I have a lot of crap, but I’ve got some good crap and some expensive crap. I think I need to watch George Carlin’s “Stuff” every day until it’s all gone.

And it is anxiety-fueled, which I find rather irritating. Sounds like you haven’t re-crapified your life. I’m looking forward to doing the same!

25,000 $ is a lot of money to many people in the World.
I know people in Eastern Europe who earn about 4,000 $ a year and they live “quite well” – according to their entourage/friends/etc. who earn significantly less!
With 25,000 $ a month you could move to some Eastern European country and you’ll be considered rich! With that income you could buy an apartment in Bulgaria!

I agree with Escapist, there are a lot of people in this world that live on a salary of 4000$ and less, and some that even do not have a salary.
For instance in Egypt if you go to an area called ashwaeyat, you will practically cry when you see the situation of the residents that live there.
We should be grateful of what we have .